Media/entertainment and video game shares rebounded in the fourth quarter but still ended below the start of 2022. However, we still see a number of attractive valuations across our coverage with blue-chip companies like Disney and Comcast still trading in the 5-star range.

Media valuations remain attractive in aggregate. An investor buying a basket of our entertainment coverage in proportion to each firm’s market cap would hold a portfolio trading about 18% below what we believe it’s worth. For video game companies, that portfolio would be 23% below what we believe it’s worth.

Given the number of discounted names, we would prefer to own high-quality, diversified firms like Walt Disney. Disney has exposure to streaming revenue growth but also generates multiple other sources of revenue and cash flow.